Advantages and drawbacks of doing business with credit cards


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cards for Business » Advantages and drawbacks of doing business with credit cards

Advantages and drawbacks of doing business with credit cards

The content is accurate at the time of publication and is subject to change.

Many small business owners benefit a great deal by doing business with credit cards as they are specifically designed to help business owners to run their businesses successfully. Business credit cards carry a lot of benefits for card holders, but they also have some inherent problems that are associated with them as well. By the end of the day, it all depends on how well you use these cards as a business owner.

There are a number of friendly payment schemes that are offered by credit card companies on business credit cards. For instance, if you have a huge expense to make for your business, you may separate it from the outstanding balance. The card company will help you draft separate payment plans for that debt, while the remaining expenses on the card can be taken care of in the normal way. This way, your credit history will not get affected by a single large expenditure. The payments will also not attract penalties.

If you are a small business owner and have a few employees, then you may use the option of taking on the add-on cards. You can hand this out to your employees. These add-on cards have 2 benefits. First of all, the expenses that are incurred by the employees will help in getting you additional reward points which can later be redeemed through the use of your card. This can also be used as a mode of payment where salaries can be paid.

The biggest advantage in using these business credit cards is that you will have a chance to get an overview of the overall expenditure and income related to your business with the help of your monthly expense report. This will give you a better idea of your expenses and where most of the money has gone. You can also spot wastage and cut down your expenses in the future. This report can be very useful while auditing or tracking business-related expenses.

You will have a card debt that would be available based on the credit limit you have. This can work both ways while you do business. The credit card may be used to make payments and you can transfer cash from the savings account even after a month or more after the actual expense has occurred. But, the risk of paying a high rate of interest is always there. This may sometimes be much more than what the banks charge or more than the loan interest.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!